Hi John,
Thank you for your reply.
My feeling is that we cannot apply OLS in this case because we are looking
at the share of total distance a person travels on a particular day by, for
example, car. Many people not travel by car at all on a particular day so
their dependent variable will be zero, whereas many others will travel
exclusively by car on that day so their share of total distance travelled
that day that is done by car is one. (And the same will be true for the
other mode shares - transit and walking.)
The general advice seems to be that we would have to model this using a
tobit model with 2 cluster points (at zero and one) if we model each
equation separately because OLS, it is said, will give a poor fit and could
introduce bias.
Because the independent variables are the same for each dependent variable,
I would think that the error terms of each of the separate equations would
be related somehow. Or, at least, this should be checked for/accounted for
using some kind of SUR and the results compared with the three separate
estimations.
However, I am open to all advice on this.
Regards,
Mark
At 10:21 09/12/2003 -0500, you wrote:
Hi,
If the independent variables are the same, the OLS and SURE estimators are
equivalent. So, there is no gain in applying this estimator.
John Kane
Dept. of Economics
SUNY-Oswego
Mark Hanly
Research Fellow
ESRC Transport Studies Unit
University College London
London WC1E 6BT
tel +44 (0)20 7679 1584
fax +44 (0)20 7679 1567
www.cts.ucl.ac.uk
www.cts.ucl.ac.uk/seminars
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